Is IPL bigger than Diwali for FMCG?

Mangoes in summer. Beverages during IPL. Mithai at Diwali. Ghee and dairy products during Janmashtami and regional festivals. Indian consumers have certain preferences, and it reflects the increased consumption of those food categories. The seasonality for consumption is impacted by sporting events, cultural traditions, festivals and even the weather. But 2020 is the year of the COVID-19 virus and consumption trends that we observed in the past haven’t worked this year.

However, it’s made us wonder if IPL is the new kid on the block that is challenging millennia-old traditions of The Big Fat Festivals: Navaratri/Durga Pujo/Diwali/Ramzan/Eid! Consider this – IPL is undoubtedly more inclusive than all the festivals put together. Do consumption trends support that story? Here’s looking at some insights about the “seasons” that impact FMCG sales in India.

KEY SEASONS FOR CONSUMER GOODS IN INDIA

1. Indian Premier League

If one sport can define India, then it has to be cricket. The passion for the game cuts across all barriers of religion, culture, class and politics. In a country as polarised as India, it’s a miracle. 

At the heart of this miracle is IPL which arouses passions to a fever pitch, and creates a furore in the market. Every brand worth its salt wants to be a part of the championship series and capitalise on the consumption boom. Beverages typically do very well during the IPL season which is played out over the summer months – incidentally also peak months for the category.

But 2020 was also the year of the COVID-19 pandemic. In India, several lockdowns were announced over the summer months of March, April and May. It impacted the availability of non-essential food categories including Beverages. The tailwinds for the category worsened when IPL was rescheduled to begin in September.

Thankfully, the category has bounced back albeit with a shaky growth since June 2020. However, we can no longer observe the IPL effect on the category’s sales.

2. The Big Fat Festivals: Navaratri/Durga Pujo/Diwali/Ramzan/Eid

September to December is the festive season for India with back-to-back celebrations of Navaratri, Durga Pujo, Diwali, Eid, Christmas and New Year. There is a deluge of food, gifts and sales during this season, and people don’t think twice before splurging on the festivities. 

Brands customise their offerings for the season with gifting options of special festive packs – cookies, juices, chocolates, chips, and namkeens. What Cadburys pioneered in 2002 with gift packs is now de rigueur, and a massive success for brands.

Thus far, our data from 2016 and 2017 shows that about 12% of total sales in the snacks category were from gift packs. Sales also grew sharply in October in both years. In 2020, with muted celebrations and emphasis on social distancing, the jury is out on the performance of the gift packs and combos. What’s your take?

3. Regional New Years

The regional festivals of Ugadi, Vishu, Bihu, Tamil and Bengali New Year’s occur in April and May. Consumption of many FMCG products – food products, in particular, also increases sharply during this time. In the graph below, our data shows the 2019 sales of ghee, a primary ingredient of Indian sweets, spiked in April and May. It is comparable to the consumption of ghee during the big fat festival seasons that occur from September to November. Again, while we haven’t observed the trend in 2020 due to the pandemic, nothing stops us from being ready for 2021. Right? 

How do the trends highlighted in this article compare to your brand’s experience? What are your product’s peak seasons? What steps do you take to maximise your sales during peak season? We would love to hear from you in the comments section.

Don’t have enough visibility and insights on seasonality in your segment? Book a free consulting session with us at marketing@mobisy.com.

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